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Tuesday, 11 October 2011

Key eurozone debt summit delayed amid political deadlock

A great comment from Mike Ruppert to all this -

"Whoopee! -- No, wait a minute... Greece is still going to default. Slovakia is refusing to ratify the EFSF, Peak Oil is still denying cheap energy, and resources are still growing scarcer. And this great handshake means that trillions of new debt are going to be printed and laid on the backs of the people. Since the debt that already exists can never be repaid, I see little grounds for optimism. But the dinosaurs will have their little rally and sip more champagne while urging the protesters below them to "just eat cake"". -- MCR

A crucial summit of European Union and eurozone heads of state has been delayed by a week amid continued political deadlock over the debt crisis.

Leaders from the full 27-strong membership were set to meet on Monday, October 17, with the eurozone heads continuing talks on October 18 in what was supposed to be a sustained effort to produce a comprehensive resolution plan.

But Herman Van Rompuy, the president of the European Council, on Monday said that "further elements were needed" to reach an agreement over the Greek rescue plans and the eurozone's own bail-out facilities. The meetings will now take place on October 23 instead.

Mr Rompuy, who first announced the delay on Twitter, issued a statement that read: "These elements are closely related to the outcome of the troika mission to Greece on the state of implementation of the programme and to the Commission's plans for a framework for the bank recapitalisations, taking into account the work of the European Banking Authority."

He added that leaders would use the delayed meeting to "finalise our comprehensive strategy" and present a plan for stabilising the eurozone by the G20 meeting on November 3.

Officials from the EU, the European Central Bank and the International Monetary Fund (IMF) - the so-called troika - are expected to finish their assessment of Greek finances as early as Tuesday. But their highly-anticipated evaluation may not be published until the middle of next week, according to insiders.

European leaders and the IMF will then decide whether or not to disburse the €8bn tranche of last year's €110bn Greek bail-out. The Greek government has said it will run out of money by the middle of November.

Leaders will use the extra week to reach an agreement on how to recapitalise the banks and whether to expand the European Financial Stability Facility (EFSF), the eurozone's €440bn bail-out fund. France is determined not to use taxpayer payer money to prop up the banks, while Germany is refusing to bolster the EFSF.

In yet another delay, Slovakia's parliament on Monday failed to reach a decision on whether to extend the powers of the European Financial Stability Facility, the eurozone's bailout fund. The parliament will reconvene to continue discussions on Tuesday.

However, Malta's parliament approved a deal to expand the EFSF on Monday night.

Here is an earlier article (from yesterday)

Nicolas Sarkozy and Angela Merkel set a date to save Europe

France and Germany have pledged to present a plan that resolves the eurozone's debt crisis before the end of the month.

The promise was made by President Nicolas Sarkozy and Chancellor Angela Merkel after a bi-lateral summit in Berlin yesterday, which was once again full of rhetoric but devoid of detail.

Both leaders committed to a "comprehensive" response that they suggested would involve a recapitalisation of Europe's banks, accelerating economic co-ordination in the eurozone and dealing with Greece.

"We are not going into details today," Chancellor Merkel said. "The whole package will be ready by the end of the month."